VANCOUVER, BC, June 28, 2021 /CNW/ - Bluestone Resources
Inc. (TSXV: BSR) (OTCQB: BBSRF) ("Bluestone" or the
"Company") is pleased to provide an update on the Company's
activities during the first half of 2021 and an outlook for the
remainder of the year.
In the first quarter of 2021 Bluestone made a strategic decision
to capitalize on Cerro Blanco's near-surface, high-grade
mineralization through an open pit development scenario. This
change in corporate strategy was transformative, and effectively
doubled the gold resource ounces and production profile which
tripled the NPV5% (after-tax) of the project to US$907 million. Cerro Blanco is now an asset
capable of producing over 300,000 ounces of gold and 1.0 million
ounces of silver per year at first quartile all-in sustaining cash
costs. The new project will contribute significantly more to local
stakeholders through employment, economic benefits, and taxes.
Since the change in development strategy the Company has been
focused on advancing key initiatives that include a feasibility
study, permitting, and capacity building in the communities within
the area of influence.
Jack Lundin, President and CEO,
commented, "We are very pleased to report on the progress being
made by the team at Cerro Blanco and we remain on track to deliver
the feasibility study by Q1 2022. Importantly, we have advanced our
environmental permit amendment application that will capture the
change in mining method. We anticipate submitting this
application by the end of the year and receiving approval in the
second half of next year, which would allow us to kick off
development activities."
Mr. Lundin added, "Furthermore, in preparation for the
development of the Cerro Blanco gold project, I am pleased to
announce the initiation of vocational skills training and
educational programs within the communities surrounding the
project. Education is a fundamental aspect to improve the quality
of life through better opportunities. The initial uptake in
enrolment has been very positive, and I would like to congratulate
all the participants in taking the first step in our journey
together and the hard work of our local team in making this
happen."
Bluestone is well-financed with over US$40 million in cash on the balance sheet which
will allow the completion of these major milestones.
Feasibility Study
Site general arrangement drawings that will finalize layouts for
the project are nearing completion. Mine design activities have
progressed including a mine plan optimization exercise based on the
PEA that incorporated a trade-off analysis in plant throughput. The
study indicated that through better management of lower grade
material and improved scheduling throughout the life of mine, a
reduction in plant size from 5.0 to 4.0 mtpa could be achieved
while maintaining a similar production profile and Net Present
Value. Detailed geotechnical studies including drilling were
completed and confirm the pit slope design in the PEA. Mine mobile
equipment selection has started and requests for proposals will go
out shortly.
Additional metallurgical studies are underway focusing on the
upper Salinas unit utilizing drill core from the recently completed
drill program. A potential opportunity to increase the final grind
size from 53 microns to 75 microns is being investigated which
would improve operability and lower the number of filters required
for dry stack tailings.
David Cass, Vice President of
Exploration, commented, "The potential reduction in the size of the
process plant to 4.0 mtpa represents a 20% reduction from the PEA
and will contribute to potential capital savings through equipment
sizing and improve operations by reducing the size of the filter
plant for the dry stack tailings storage. These ongoing studies
will be complimented by the recently completed 2021 drilling and an
updated resource calculation that is currently underway."
Environmental and Permitting Baseline Data
Throughout the second quarter Bluestone has been advancing
permit amendment activities. Supplemental baseline data collection
is underway, focusing on flora, fauna, and air and noise
monitoring. The collection of dry season data has been completed
and wet season data collection is underway. A new social baseline
study was conducted to improve the understanding of the current
socio-economic status of the local communities.
The Company is updating the environmental impact assessment to
capture the new mining method through an updated environmental
management plan as set out by Guatemalan Law. While aspects
of the project layout will increase in size, fundamental design
characteristics will remain unchanged, including the processing
plant, dry stack tailings, water management, infrastructure, and
facilities.
Local Skills Development Training and Capacity
Building
The Company is pleased to announce a partnership with a
nationally accredited Guatemalan institution which is a recognized
leader in job skills training as an accredited vocational school
and have played an important role in skills development in
Guatemala. Through our
partnership, Bluestone will be offering technical training courses
to members of the local communities in preparation for mine
development. Programs and certifications particular to the
construction and operations phases include masonry, carpentry,
mechanics, technicians, and welding. Courses range on average
from 12 to 18 months in duration and will help prepare for early
works, which the Company will be looking to initiate late next
year.
In addition to job skills training, Bluestone is undertaking an
adult education program with the National Government and local
educational institutions aimed at enhancing the social and economic
conditions of the communities within the project area of influence,
to improve eligibility for future employment and/or
entrepreneurship. These skills are aimed at literacy and education
levels to meet entry requirements for job skills training
programs.
Nadia Carotenuto, Vice President
Human Resources & Organizational Development, commented, "We
believe in creating shared value by building sustainable human
capital and economic diversification through local training and
local procurement. We are very excited about our education and
skills training initiatives and believe these programs will
directly benefit stakeholders in preparation for development."
To improve the understanding and awareness around mining in
Guatemala, Bluestone, through the
University of Arizona, is organizing an
introductory mining course for stakeholders in Guatemala. The aim of the five month,
10-module course is to educate stakeholders on the latest
technology and advancements in the mining sector.
Jack Lundin, President and CEO,
commented, "We believe this is a great opportunity to improve and
build on the culture of mining in Guatemala. Educating people on aspects of
mining and how to do it in a responsible manner is the first step
in creating change in the industry. Natural resources are essential
to our daily lives and managing those resources for our future
generations is important."
Geothermal Project
In line with Bluestone's commitment to responsible development
and reducing our carbon footprint with the development of the mine,
the Company has undertaken additional work on the Mita Geothermal
project. The Company completed a scoping study that incorporated a
review of the historical data and testwork completed on the
project. An updated reservoir calculation was completed that
estimated a reserve capacity of over 20 MW. The scoping study
focused on several different sizing scenarios ranging from 5 MW to
20 MW, and the results highlighted an economic project with an
after-tax IRR of over 15%. Next steps include geological and
geophysical surveys to further refine injection well locations
alongside the proven production wells, followed by a feasibility
study.
Peter Hemstead, CFO, commented,
"The geothermal project represents a unique opportunity that
supports our goal to reduce our carbon footprint alongside the
development of the mine. We feel this separates us from our peers
and adds value to a great gold project. Over the course of the next
six months, we will continue to de-risk the geothermal project in
anticipation of a potential power call in Guatemala."
Qualified Person
David Cass, P.Geo., Vice
President Exploration, is the designated Qualified Person for this
news release within the meaning of National Instrument 43-101 and
has reviewed and verified that the scientific and technical
information set out above in this news release is accurate and
therefore approves this written disclosure of the technical
information.
About Bluestone Resources
The Cerro Blanco Gold Project is an advanced stage near surface
development project. A PEA on the project highlighted an asset
capable of producing over 300 koz/yr with an average annual
production of 231 koz/yr at all-in sustaining costs of ~$642/oz (as defined per World Gold Council
guidelines, less corporate general and administration costs) over
an initial 11-year mine life. The Company trades under the symbol
"BSR" on the TSX Venture Exchange and "BBSRF" on the OTCQB.
On Behalf of Bluestone Resources Inc.
"Jack Lundin"
Jack Lundin | President, CEO
& Director
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward Looking Statements
This press release contains
"forward-looking information" within the meaning of Canadian
securities legislation and "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 (collectively, "forward-looking statements"). All
statements, other than statements of historical fact, that address
activities, events, or developments that Bluestone Resources Inc.
("Bluestone" or the "Company") believes, expects, or anticipates
will or may occur in the future including, without limitation: the
estimated value of the Cerro Blanco Project (the "Project"); the
planned open pit development scenario for the Project; the
estimated gold production volume per year from the Project; gold
and silver price estimates used in the preliminary economic
assessment ("PEA"); additional financial estimates of Project
economics resulting from the PEA, including peak and average annual
gold productions amounts, average all-in sustaining costs, average
annual free cash flow, after-tax net present value ("NPV"),
after-tax internal rate of return, initial capital requirements,
life of mine gold and silver production amounts, measured and
indicated resources and NPV assuming a higher gold price estimate;
the Company's plan to advance an EIA application in parallel to
completing a bankable Feasibility Study by the end of 2021; the
Company's target to initiate Project development in the second half
of 2022; anticipated receipt of an EIA permit in the second half of
2022; mineral resource estimates; the estimated tonne-per-day
recovery volume of the planned open pit operation; the planned
conventional process plant and associated processing methods; the
Company's goal to prepare a coordinated Environmental and Social
Impact Assessment document that aligns with the IFC Performance
Standards, Equator Principles as well as national requirements;
engagement with local communities and stakeholders to remain
on-going through the process; the Company's plan to advance the
development of the EIA document in 2021 for submittal prior to the
end of the year; the reasonable prospect of eventual economic
extraction demonstrated by reported mineral resources; gold and
silver price estimates and a reasonable contingency factor used as
the basis for mineral resource estimate cut-off grades; reasonable
expectation that the majority of Inferred Mineral Resources could
be upgraded to Indicated Mineral Resources with continued
exploration; results of mineral resource estimate sensitivity
analysis; uncertainty that the PEA will be realized; the potential
for subsequent assessment of mining, environmental, processing,
permitting, taxation, socio-economic and other factors to affect
mineral resources; estimated diluted mill feed to be processed over
the life of mine from the main pit area; planned trucking of mill
feed to a primary crushed located to the east of the main pit;
amount of waste to be stored in a dump adjacent to the main pit;
estimated open-pit mining dilution; measured and indicated mill
feed amounts; estimated process plant capacity in tonnes per day of
ore; planned processing rate measured in dry tonnes per year and
average feed grade thereof; details of planned processing,
including pre-oxidation, 48-hour leach and carbon-in-pulp
absorption circuit elements and expected gold and silver recovery
percentage to produce a dore; estimated initial capital required to
fund construction and commissioning; beneficial existence of a
significant amount of development already in place, a water
treatment plant, maintenance and warehouse facilities, offices and
communications; capital and operating cost estimates; estimated
all-in cash costs including sustaining capex; planned installation
of a new power transmission line as part of the construction of the
Project; the Project's expected economic benefits to Guatemala. These forward-looking statements
reflect the current expectations or beliefs of the Company based on
information currently available to Bluestone and often use words
such as "expects", "plans", "anticipates", "estimates", "intends",
"may", or variations thereof or the negative of any of these
terms.
All forward-looking statements are made based on Bluestone's
current beliefs as well as various assumptions made by Bluestone
and information currently available to Bluestone. Generally, these
assumptions include, among others: the presence of and continuity
of metals at the Cerro Blanco Project at estimated grades; the
availability of personnel, machinery, and equipment at estimated
prices and within estimated delivery times; currency exchange
rates; metals sales prices and exchange rates assumed; appropriate
discount rates applied to the cash flows in economic analyses; tax
rates and royalty rates applicable to the proposed mining
operations; the availability of acceptable financing; the impact of
the novel coronavirus (COVID-19); anticipated mining losses and
dilution; success in realizing proposed operations; and anticipated
timelines for community consultations and the impact of those
consultations on the regulatory approval process.
Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual results of Bluestone to
differ materially from those discussed in the forward-looking
statements and, even if such actual results are realized or
substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, Bluestone.
Factors that could cause actual results or events to differ
materially from current expectations include, among other things:
potential changes to the mining method and the current development
strategy; risks and uncertainties related to expected production
rates; timing and amount of production and total costs of
production; risks and uncertainties related to the ability to
obtain, amend, or maintain necessary licenses, permits, or surface
rights; risks associated with technical difficulties in connection
with mining development activities; risks and uncertainties related
to the accuracy of mineral resource estimates and estimates of
future production, future cash flow, total costs of production, and
diminishing quantities or grades of mineral resources; risks
associated with geopolitical uncertainty and political and economic
instability in Guatemala; risks
related to global epidemics or pandemics and other health crises,
including the impact of the novel coronavirus (COVID-19); risks and
uncertainties related to interruptions in production; the
possibility that future exploration, development, or mining results
will not be consistent with Bluestone's expectations; uncertain
political and economic environments and relationships with local
communities and governmental authorities; risks relating to
variations in the mineral content within the mineral identified as
mineral resources from that predicted; variations in rates of
recovery and extraction; developments in world metals markets; and
risks related to fluctuations in currency exchange rates. For a
further discussion of risks relevant to Bluestone, see "Risk
Factors" in the Company's annual information form for the year
ended December 31, 2019, available on
the Company's SEDAR profile at www.sedar.com.
Any forward-looking statement speaks only as of the date on
which it was made, and except as may be required by applicable
securities laws, Bluestone disclaims any intent or obligation to
update any forward-looking statement, whether as a result of new
information, future events or results, or otherwise. Although
Bluestone believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance, and
accordingly, undue reliance should not be put on such statements
due to their inherent uncertainty. There can be no assurance
that forward-looking statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements.
Non-IFRS Financial Performance Measures
The Company
has included certain non-International Financial Reporting
Standards ("IFRS") measures in this news release. The Company
believes that these measures, in addition to measures prepared in
accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company and to compare
it to information reported by other companies. The non-IFRS
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures do not
have any standardized meaning prescribed under IFRS, and therefore
may not be comparable to similar measures presented by other
issuers.
All-in sustaining costs
The Company believes that
all-in sustaining costs ("AISC") more fully defines the total costs
associated with producing gold.
The Company calculates AISC as the sum of refining costs, third
party royalties, site operating costs, sustaining capital costs,
and closure capital costs all divided by the gold ounces sold to
arrive at a per ounce amount. Other companies may calculate this
measure differently as a result of differences in underlying
principles and policies applied. Differences may also arise due to
a different definition of sustaining versus non-sustaining
capital.
AISC reconciliation
AISC and costs are calculated
based on the definitions published by the World Gold Council
("WGC") (a market development organization for the gold industry
comprised of and funded by 18 gold mining companies from around the
world). The WGC is not a regulatory organization.
SOURCE Bluestone Resources Inc.